What advantage do cash discounts provide to buyers?

Cash discounts provide buyers with a reduction in invoice costs for early payment, which is a significant advantage in cash flow management. By taking advantage of these discounts, a buyer can reduce the overall expense of their purchases, effectively lowering the cost of goods acquired. This practice encourages prompt payment and helps improve the financial efficiency of both buyers and sellers.

Being able to take advantage of a cash discount can also lead to better budgeting and financial planning for buyers, allowing them to allocate resources more effectively. Additionally, for businesses, consistently receiving payments early can improve their liquidity and financial stability.

The other options do not accurately depict the primary benefit of cash discounts. While higher quality products might be appealing, they are not inherently associated with cash discounts. Similarly, a bonus reward for large purchases and an extended payment period are not connected to the immediate financial advantage that cash discounts offer, which is centered around incentivizing timely payment.